A couple of years ago, I reported that the House had overwhelmingly passed a Santee Cooper reform bill (H4376) in order to protect ratepayers and prevent another failure like the V.C. Summer nuclear project from happening again. The three-pronged approach (1) provided a new governance structure to hold the Santee Cooper Board of Directors accountable, (2) increased ratepayer protections by creating the Santee Cooper Rate Reduction and Stabilization Fund, and (3) created the Santee Cooper Joint Evaluation and Recommendation Committee (SCJERC) that will determine whether a sale is in the best interest of ratepayers and taxpayers and puts a transparent process in place to vet potential buyers. The bill created the Santee Cooper Rate Reduction and Stabilization Fund and required it to be explicitly used for rate relief. Funds include: Toshiba settlement money, any gains made from the sale or salvage of V.C. Summer assets, and cost savings from governance. The legislation also authorized the governor to remove at-will all current Santee Cooper board members and shortened the terms from seven years to four years.
The only problem with the bill was that it was never passed by the Senate. Instead, the General Assembly passed H4287 which only required the Department of Administration to obtain a recommendation from the Public Service Authority Evaluation and Recommendation Committee. I am requesting a report as to where the Toshiba settlement money was actually spent.
On February 11, 2020, the General Assembly received from the Department of Administration (DOA) their report outlining three finalized options for the future of South Carolina’s state utility, Santee Cooper. These options include a sell/purchase option; an option to bring in an outside manager, and an option to reform Santee Cooper. After reviewing numerous offers, the DOA completed their evaluation, chose the best three options for the state-owned utility, and reported to the General Assembly.
Option 1. Sell Santee Cooper to Florida-based and privately-owned utility NextEra. Their proposal contains a controversial provision that would put South Carolina taxpayers on the hook for $2.3 billion on new power plants even if those projects are cancelled. That doesn’t sound good.
Option 2. Come to terms with a management agreement with Virginia-based and privately-owned Dominion Energy. Last year Dominion completed the purchase of Cayce-based S.C. Electric & Gas. They would provided management services to Santee Cooper while allowing it to remain a state-owned utility.
Option 3. Reform Santee Cooper while keeping state ownership and management. This would only work if the governance structure were reformed to give the Governor more power to remove Santee Cooper board members – the same members who spent $4 billion on two nuclear reactors that never will be completed.
Now, the House and Senate must decide on the best option for ratepayers and taxpayers in South Carolina. Ways and Means Chairman, Murrell Smith, appointed ten members to an Ad-Hoc Committee to go through all of the information in the DOA report and bring their findings to the full House within 30 days. This is all in response to the billions in debt accumulated from the failed V.C. Summer nuclear plant project that has resulted in lawsuits and higher rates for electric customers who are served by Santee Cooper as well as most Electric Co-ops, many of whom purchase electricity for their customers. It’s an issue we (and that includes the Senate) must carefully push to a resolution.